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Gift or Lump of Coal: U.S. Cross-border Tax Changes Won’t Be Home for Christmas

As 2021 comes to a close, countries are moving toward harmonizing tax rules for multinationals, but stalled talks on the Build Back Better Act (BBBA) in the United States means new uncertainties for a global agreement and for taxpayers. Despite the 2017 U.S. tax reform serving as inspiration for current discussions of a global minimum […]

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Permanent Build Back Better Act Would Likely Require Large Tax Increases on the Middle Class

The Congressional Budget Office (CBO) has given us a sobering look into our fiscal future under the Build Back Better Act (BBBA), estimating that if all the bill’s policies were made permanent, $3 trillion would be added to the national debt over the next 10 years. This is on top of more than $7 trillion […]

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Build Back Better Budget Deficits Could Mean More Inflation, More Policy Uncertainty

As the Senate weighs changes to the spending and tax portions of the Build Back Better Act, the Congressional Budget Office (CBO) and Tax Foundation find the bill would increase the cumulative budget deficit over the next 10 years—contrary to claims the legislation is “fully paid for.” The deficit impact may contribute to short-run inflation […]

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The Interest Limitation Pile-On

How should tax policy treat interest expenses? Historically, corporate income tax systems in the U.S. and around the world have allowed businesses to deduct their interest paid. As Congress contemplates adding a new worldwide interest limitation rule as part of the Build Back Better Act (BBBA), it is useful to consider the potential effects of […]

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Book Minimum Tax versus Corporate Rate Increase: Pick Your Poison

As the Senate considers which components of the House Build Back Better Act (BBBA) to include, one key difference between the original Ways and Means draft and the later Rules Committee version is on corporate taxes. The original draft would have raised the corporate tax rate to 26.5 percent, while the Rules Committee version would […]

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Who Gets Hit by the Book Minimum Tax?

The current version of the reconciliation bill—the Build Back Better Act—attempts to walk a fine (politically imposed) line: raising hundreds of billions of dollars from higher corporate taxes without raising the corporate tax rate. The centerpiece of this effort is the book minimum tax, a new alternative minimum tax applied to the financial statement income […]

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How Will Build Back Better Impact Inflation?

Last week, the Bureau of Labor Statistics (BLS) announced that prices had risen 6.2 percent in the year up to October 2021, the fastest rate since 1990. The persistently high inflation in recent months has made some lawmakers question the need for additional deficit spending. In the short term, the Build Back Better Act (BBBA) […]

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Red Flags Emerge in Build Back Better Book Minimum Tax, Interest Expense Limitation

The Build Back Better Act (BBBA) would raise taxes to pay for social spending programs. But the design of some of the tax increases may end up hurting private pensions, among other problems. By relying on measures of income reported on company financial statements, i.e., book income, the proposed corporate alternative minimum tax and the […]

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How Do Build Back Better Taxes Affect 5G Competition?

One unintended consequence of the tax proposals in the Build Back Better Act is a higher potential burden on wireless spectrum investments. Proposals like levying a minimum tax on book income would retroactively tax past spectrum purchases and raise the tax burden on future spectrum purchases. In turn, it could distort the prices companies are willing […]

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Comparing Tax Provisions in Different Versions of the House Build Back Better Act

President Biden’s Build Back Better agenda has changed several times in the past few months. In September, the House Ways and Means Committee released a draft that included $3.5 trillion in spending and tax credits, paired with roughly $2.1 trillion in tax increases (resulting in a net tax increase of about $1 trillion). On October […]